We don't talk about the mechanics of *WHY* UBI is affordable enough.

Any individual plan is complicated, that's life, but the economics of why UBI is affordable are actually quite simple and I want to talk about them.

A thread:

So when governments spend money it can affect whole economies, why? Because governments are big. What UBI is really doing is affecting a whole economy. How does that work? What are the limits on what a government can tax and spend?

Well a government doesn't need you to agree to pay taxes but it does need it's economy to be active... so when a government taxes and spends it's not worried about you saying yes or no to the tax, it's worried about what the economy will do.

That's why government spending can equally be thought of as making money out of thin air and taxing it back, it really doesn't matter because the limits on the government are:

1. How big is the economy?

2. Are prices staying reasonable or is inflation out of control?

So how does that affect UBI?

Well imagine the government gave £1billion to every citizen but also taxed every citizen £1billion. What would happen?

Nothing.

It would be pointless but it also wouldn't affect the economy and so the govt **absolutely can afford it**!!

So what makes a UBI affordable or not is not the amount of the literal cost in pounds and pence, what makes a UBI affordable or not is how it affects the economy.

We know from UBI trials all over the world that people who get UBI still go to work so UBI is fine there!

We suspect that if we just printed the money for the UBI we might get too much inflation so the real affect of the UBI comes from taxes to avoid printing the money.

BUT here is the fun part:

Taxes are taking in money & UBI is giving money out so, just like the £1billion example

the taxes and UBI are often cancelling each other out. The only thing that actually affects the economy and actually makes UBI affordable or not is the people who pay more into the UBI in taxes than they get out and the people who get out more than they put in.

This is redistribution. It is not the govt spending money to buy physical things like concrete or buying up people's time to organise govt paperwork.

Instead what redistribution does is it changes *who* spends money privately in the economy. It changes who decides what to buy.

So, in practice all UBI can ever do is simulate what spending would be like if 100% of ppl had a job that paid them enough to be above the poverty line or if another benefits system eliminated poverty.

All UBI can ever do is the same as any other method of eliminating poverty.

This is really important because it tells us that ANY system that eliminates poverty will produce the same spending as UBI and the same impacts on the economy.

And as we know that ppl can't always gets jobs we will always want to have some system to eliminate poverty.

We do that not just for the ppl themselves who are trapped by it but also for the rest of us so that we know we can always walk away from an abusive partner or job.

Eliminating poverty puts each of us in control of our lives.

UBI is as affordable as any other way of doing that.

A few extra notes:

- Individual UBI plans aren't really about making it affordable, they're about deciding which taxes most efficiently and quietly do the job.

- The economy is not hurt by higher taxes as such, extra taxes offset by extra spending are just fine economically.

-The real practical limits for UBI is inflation.

If you slow economic activity you cause inflation and if you give people too much cash then you cause inflation.

As with any welfare program of any kind the limit on its generosity is inflationary pressure.

-The great advantage of UBI over traditional welfare programs is that it's less paperwork and people get it for certain. That's always why it's better than NIT.

Paperwork and admin are real costs, unlike the £1billion example they don't get cancelled out, they are real drag.

So given that *any* successful welfare program will, by definition, have to achieve at least as much as UBI and so will, by definition, have the same effect on the economy we can safely say that their extra paperwork and admin will make then more expensive than UBI in real terms.

Finally limits on redistribution (because that's the real issue) as UBI has no measurable effect on employment at the levels talked about the only relevant factor is redistribution.

There is, presumably, some maximum viable level of redistribution. Either it's above the poverty line or it isn't.

If it's below the poverty line no benefits program can ever work.

If it's above (which seems likely) then UBI will work just fine.

I'm going to tag some UBI ppl in case this is a helpful thread to share, if being tagged is irritating let me know and I won't do it again!

@scottsantens @UBILabNetwork @UBILabBrum @theUBIguy @TheUBICenter @UBILabYouth @Tom28513893 @Women4UBI